Investors in New Ventures Demand High Rates of Return for Several

question 13

Multiple Choice

Investors in new ventures demand high rates of return for several reasons.Which of the following is NOT a reason?

• A) New ventures are extremely risky.
• B) Investors in new ventures are able to diversify their risks fairly well.
• C) Entrepreneurs have information about new ventures that they don't share with investors, allowing them an unfair advantage.
• D) Entrepreneurs are often overoptimistic when they project the future prospects of their new ventures.
• E) Unlike investors in the stock market who are largely passive, investors in new ventures provide several types of assistance to new ventures and they want compensation for this assistance.

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Definitions:

Povidone-iodine

An antiseptic used for skin disinfection before and after surgery and for the treatment of minor wounds.

Alcohol

A chemical substance found in drinks like beer, wine, and spirits, which can alter consciousness and often has intoxicating effects.

Venipuncture

The puncture of a vein with a needle, typically for the purpose of drawing blood or administering intravenous therapy.

Hydrogen peroxide

A chemical compound (H2O2) used as an oxidizer, bleaching agent, and antiseptic.